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Porter Airlines to revisit possible IPO

Porter Airlines announced plans to explore a possible IPO or to seek financing from private equity and institutional investors in Mar-2011 (Globe and Mail, 01-Mar-2011). In Apr-2010 Porter attempted to raise USD120 million through an IPO but postponed the offering after a muted reception from investors. Porter CEO Robert Deluce stated this time around the chances are better as the economy has rebounded and travel demand is up.

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The first commercial flight of the Bombardier CS300 on 14-Dec-2016, operated by airBaltic from Riga to Amsterdam, will be a major milestone for the Canadian manufacturer's new C Series aircraft programme. Three CS100 aircraft are already in service with SWISS, so the airBaltic flight will mean that both variants of the C Series are finally in commercial operation.

The programme is Bombardier's first wholly new aircraft development, aimed at the 100 to 150-seat market segment and offering advantages of fuel efficiency, cabin space, noise and emissions. Bombardier once targeted 2013 for entry into service, but has been dogged by problems and delays. In 2015, Bombardier seemed to have overstretched itself. The C Series received no new orders during the year and Bombardier was forced to seek investment from the Province of Québec to rescue the programme.

In 2016 the company has recovered to win a net 117 new orders, its highest annual total, bringing the programme total to 360. However, competition is cut-throat, with Airbus, Boeing and Embraer all having new developments of existing products in the same space as the C Series. Bombardier's breakthrough orders from Air Canada and Delta in 2016 required heavy price discounts.

Three years ago Canada’s Porter Airlines had a different vision of how its business would take shape by its 10th anniversary in Oct-2016. The company decided to pursue ambitious expansion at its largest and strategic base by lobbying for an expansion of the runway at Billy Bishop Toronto airport to support the operation of jets at the airport, and at the same time placing an order for Bombardier CSeries jets.

Porter’s efforts ultimately failed, and during the past year the airline has been largely silent about how it intends to shape its future. Even though it generates positive customer sentiment, the lack of clarity about how it intends to shape its future has fuelled speculation over Porter’s ultimate staying power.

It is not clear if privately owned Porter is profitable, but after the sale of a terminal at Billy Bishop its balance sheet is undoubtedly in favourable shape, giving the airline some flexibility when and if it crystallises any plans for expansion.